Mr. Marc Edwards reports

KANE BIOTECH RECEIVES OFFER FOR ITS INTEREST IN STEM ANIMAL HEALTH

On Dec. 19, 2023, Kane Biotech Inc. signed a non-binding offer for the sale of its interest in STEM Animal Health Inc.

"In 2018, when I joined as CEO, Kane made the strategic decision to continue to build Kane's animal health portfolio, while expanding into advanced wound care," said Marc Edwards, chief executive officer of Kane Biotech. "Since that time, we have created STEM in partnership with Animalcare, received VOHC [Veterinary Oral Health Council] Seal of Acceptance for our pet oral care water additive, and signed licensing and distribution agreements with Animalcare and Skout's Honor Pet Supply Company. These actions have created real value within STEM."

The terms of the offer remain confidential but specify that Kane will sell its ownership of STEM. In addition, pursuant to the terms of the offer, Kane will receive a deposit in the amount of $625,000 (U.S.), which will be applied toward the sale price of Kane's interest in STEM. The parties have agreed to collaborate using their best efforts to enter into a binding share purchase agreement with respect to the sale of STEM within 90 days.

"We are pleased to receive an offer that reflects the full value we see in STEM," said Philip Renaud, chairman of the board of Kane. "This opportunity allows Kane to focus on human health, specifically wound care and dermatology solutions, two areas where biofilms significantly impact patient health."

In addition, the company and Pivot Financial I LP have agreed to extend the term of the company's amended credit agreement between the company and Pivot dated Sept. 11, 2023, by extending the maturity date of the credit facility from Nov. 30, 2023, to March 31, 2024.

The proposed sale of Kane's interest in STEM and the proposed amended credit facility are both subject to the execution of definitive transaction documents and the receipt of any necessary approvals, including the approval of the TSX Venture Exchange and, potentially, shareholder approval.

About STEM Animal Health

In September, 2020, Kane formed STEM as a joint venture with Animalcare Group PLC. STEM is dedicated to treating biofilm-related ailments in animals. STEM has a global licence over Kane's existing range of animal health oral care products and, in collaboration with Animalcare, focuses on the research and development of novel animal treatments based on biofilm targeting technology. Animalcare has a one-third-plus-one-share equity interest in STEM with the balance owned by Kane.

About Kane Biotech Inc.

Kane Biotech is a biotechnology company engaged in the research, development and commercialization of technologies and products that prevent and remove microbial biofilms. The company has a portfolio of biotechnologies, intellectual property (80 patents and patents pending, trade secrets, and trademarks) and products developed by the company's own biofilm research expertise and acquired from leading research institutions. StrixNB, DispersinB, Aledex, bluestem, bluestem, silkstem, goldstem, coactiv+, coactiv+, DermaKB and DermaKB Biofilm are trademarks of Kane Biotech.

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